Gold hovered near one-week lows on Monday, after falling about 2% in the previous session, as a stronger-than-expected US jobs report likely increased the possibility of a rate hike this year by the US Federal Reserve.

The US employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth, and raising the probability of an interest rate increase this year.

Spot gold was nearly flat at $1,335.40 an ounce by 0323 GMT. It earlier touched its lowest since July 29 at 1,331.36.

"Yes, the US economic fundamentals have picked up. But, the downside risks from whatever is happening from the Brexit is still unknown. Another uncertainty that market watchers will be looking at would be the US presidential elections."

Spot gold may test resistance at $1,339 per ounce, with a good chance of breaking above this level and bouncing more towards the next resistance at $1,346, according to Reuters technical analyst Wang Tao.

"An initial dip through the Friday low during early Asian trade on Monday was well supported and we have continued to see bargain hunters step in during Chinese trade," said MKS PAMP Group trader Sam Laughlin.

Traders and top Wall Street banks expect the US Fed to raise US interest rates in 2016 after a strong July jobs report.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.

Speculators added net longs in gold futures for the first time in four weeks in the week to August 2.